Many law firms are now working hard to get to grips with the challenges and opportunities presented by AI. Some may be reluctant to admit the extent to which they are already using AI, although our recent 2023/24 Advanced Trends Report revealed 27% of respondents working in the legal sector said their firm was doing so. A further 43% told us their firm had started to research AI tools for business.
Participating in a recent roundtable event hosted by Legal Practice Manager, exploring approaches to AI, we heard how some firms were actively encouraging employees to use ChatGPT at home, to become familiar with the technology that was not yet deemed secure enough for legal practice purposes.
Where are firms really up to with AI?
Natural language tools such as Siri are now in widespread use. AI is a broad umbrella term, and many legal practices are already exploring areas where it is safe to apply and adopt AI, for example, in client onboarding and to improve the client experience. High street practices are noticing a change in demographic, with a growing number of younger clients who appear to expect more automation and instant responses that can be enabled with automation tools and AI-driven solutions.
AI also has potential to improve HR processes. Many law firms began using automation during the pandemic and AI may be a natural, albeit slower step forwards to increase efficiencies in back-office processes. However, there is a general reticence around committing to using AI for client-facing work.
AI is insinuating itself into new technologies regardless of fears, meaning even those taking a watch and wait approach will end up using AI by default. For example, Microsoft Copilot is an AI-powered productivity tool that combines the power of large language models with a business’ in-house data, working across all Microsoft applications including widely used Word, Edge and Windows 11. At Advanced we already have around 500 engineers looking at ways to adopt Copilot to speed up the delivery of features and an updates within the product development team.
Anticipated benefits of using AI
Automation has been welcomed in the legal sector as an important tool for increasing efficiency and productivity, driving higher profit margins. Implementing further AI-driven automation could be highly beneficial for instances where clients expect fixed fees for services such as will-writing.
Firms recognise the value in implementing new technology as an effective strategy to attract and retain talent and are waiting to see if, and when, candidates begin to specify AI as factor. While some firms may feel that candidates have not quite caught up with the drive for AI, others believe it is only a short matter of time before top talent asks for and expects to use AI-driven tools to enhance their productivity and experience of work. Career-driven fee earners, for example, can, and should, be thinking of ways to save time and money for higher profit margins. Implementing technology to do this will drive their own career ambitions forwards.
Automation can also power repetitive and lower-value tasks such as risk assessments, as well as assisting in standard contract writing, conveyancing and other time-consuming activities. AI is already embedded in some of these automation tools, or it very soon will be in the next generation versions.
Barriers to AI adoption
One of the most significant barriers to implementing AI is concern around compliance and most firms’ current policies require employees to avoid using any tools without certainty they are compliant. GDPR compliance is crucial where customer data will be entered into large databases for analysis and recommendation of next steps using AI. Firms are seeking more certainty here, hence, the request for staff to acquaint themselves with ChatGPT at home first, gaining experience and understanding without exposing their firm to any risk. More cautious firms admit that they are sitting back and watching while large law firms invest and take the risks with AI, before making any decisions to move forwards.
AI can certainly be used to drive down costs, but some feel this may be counterproductive when tech-savvy clients are already asking if the firm can use AI to reduce their invoice. For some practices, the fear is that if AI reduces the time to do a task, it also reduces their fee. This could potentially lead to a routine declaration on invoices about how much human expertise versus AI technology was used when doing the work. Using AI for set-fee work such as will writing means that firms can increase profit margins, but if customers expect lower prices, it may not be in their interests to use AI at all. Others take the view that the costs of implementing automation can be passed on to the client, and therefore is not something to shy away from.
Professionals working in small firms may feel they are hamstrung by important IT and investment decisions falling to the CEO, as the outcome depends on their personal understanding of what is possible with new technology, and what they are looking for in a solution. If the senior decision makers are naturally more cautious or suspicious of AI, it is unlikely to gain much traction.
Even in larger firms, decisions to invest require buy-in from all senior partners, as content and data sets need to be made available in order to implement an AI tool. When concerns about Generative AI like ChatGPT abound in the media, it drives a general scepticism around AI as a safe, compliant tool for legal professionals to use. Although younger clients may be open to AI, it may not suit others who may be more wary about the idea of firms using this as yet unregulated technology to handle their data and case information.
If we accept the unstoppable rise of AI, then now really is the time to consider the approach and develop policies and strategies to harness the benefits of this new technology - anticipating, managing and minimising the risks. One area that is going to undergo significant changes is around job roles in a law firm. Many expect that office staff will be the major casualties, as some firms have already seen a huge reduction in number of secretaries and support staff on the payroll.
AI will produce new roles and opportunities within the sector. For example, a head of innovation to drive change and implementation of new technologies, alongside a head of learning who will positively impact the future development of fee earners within a practice. There will also almost certainly be a requirement for greater oversight of work that has been produced using generative AI, possible creating specific AI supervisor roles.
Firms can use this pre-implementation period to take a look around at what software and services providers like Advanced are developing for customers. Currently we are investing in R&D for a number of new tools for the legal sector, including one called ‘Next Best Actions’ which, based on case histories, will suggest the best next course of action to a lawyer, speeding up decisions with a sound, case-based precedent approach.
Other examples of firms using AI include using a chatbot-based quote system. Recognising that price often takes priority over loyalty, firms know that clients will shop around, making it important to be able to quote immediately.
Successful adoption of AI-powered tools will enable firms to be more flexible and adapt their services to suit clients. In an environment when clients are offered and expect increasing numbers of options, it is vital that a firm can offer choice. This is particularly important with the younger generation of clients who are growing up as ‘tech natives’ and who demand more automation, with 24/7 access using chatbots and better access to their information.
Setting up internal committees and tasking certain individuals to explore how their firms can engage with AI to deliver a better experience for professionals and clients may involve learning from larger firms. Some of these are already developing their own AI-powered platforms and hubs which may, in time, become available for use by smaller firms. As in many aspects of business, being prepared for the future is crucial in order to maintain a competitive edge and attract high quality talent as well as clients to drive growth. It may be tempting to adopt a ‘wait and see’ approach, but even small firms should beware being left behind as this powerful disruptive technology is very definitely on the rise.